Four easy ways to save which I did not do and am now $4,597.40 poorer.
There have been things I’ve meant to do for a while to save some money but because they seemed unpleasant (read: I would have to do research and spend time on the phone with customer service people or it required consistent planning) I kept putting them off. I didn’t feel much pressure to do these things as none of them represented more than about 2% of my monthly take home pay. Now that I’m working for myself and have a variable income, I have decided to stop putting them off as every dollar I save at home can be put towards my business. Now that I’ve done the math, I’m deeply annoyed at myself for having waited this long. If I had done this three years ago and put this money in a money market account earning 2% interest, I’d have $4,597.40. I could be in Mexico right now instead of awaiting a high on Friday of 8 degrees, not including wind chill. And if I had put it in the S and P, I’d have $5,556.79.* I would like a double margarita, señor. Muchas gracias!
With no further adieu, please, learn from my fail. Do not put off managing the small things you could improve. Even if it does take hours on the phone with customer service.
$55/month = $660/year – Switched internet providers. My previous provider cost us $110 a month. When we signed up for internet service a decade ago, it cost $50 a month. Granted, we use a lot more than we did before Netflix streamed shows, but I thought capitalism was all about competitors finding efficiencies and one-upping each other to provide superior service for the least amount of money. If that is true, they should have been finding ways to provide higher bandwidth while the prices either followed inflation, maintained, or *gasp* went down. However, since cable providers were slow to realize their business was going the way of the dodo and customers left by the droves to cut the cord, they had to make up the revenue somewhere, so they jacked up our internet fees. I have just signed up for the only other provider in the area and will reduce our bill to about $55 a month for the first twelve months, $65 thereafter. I’m sure I’ll be unhappy about something with them in the future but right now, I’m gleeful at finally saying goodbye to my extortionist ISP.
Side note: one competitor is not capitalism, in this situation, it is most definitely a cartel. Two months before switching providers I called my ISP and asked for a better deal. The “absolute best” they could do was get me to about $95 a month. Two months after I switched providers I started getting bombarded with offers for their internet for, drumroll please, $55 a month.
$152.62 a year – Our household has a dependency issue. On bubbly water. We just can’t go back to the tap! Instead of buying cans, I dug up the old Soda Stream. Although we loved our Soda Stream years ago, we had to drive out and back to the mall (*shudder*), all in all taking 45 minutes. This was a hassle and not great for the environment; we eventually stopped using it and started drinking cans again, despite the waste that produces and the extra cost. Now that I’ve dug it out of the closet and taken a look online to see if we can get cartridges somewhere more convenient, it turns out a store five minutes away has them and they now do free delivery exchanges. We easily drink a box (twelve) of 12-oz club sodas a week, that’s 4.26 liters, for $4/week – $0.94 per liter. The $15 CO2 cartridge makes sixty liters – $0.25 per liter. At 12 cans or 4.26 liters a week, that would be $4.00*52 = $208 for cans; 4.26 * 52 * $0.25 = $55.38. Plus, less waste!
$419.61 a year – Signing up for a rewards card that makes the most cash back for our lifestyle. We have a rewards card I signed us up for in 2007. Back then they gave you $250 for every $200 you earned in cash back and a simple percentage structure for three categories of purchases. Now I have a rotating three categories of 5% that I have to sign up for every three months, 1% for everything else. It’s a hassle and moreover, it’s a hassle that only paid out about $450 last year. That is better than nothing, but if I can earn more, I should. I personally prefer cash back cards rather than travel cards for their reliability, simplicity, and flexibility.
Between different percentages off in different categories, bonuses, and fees, I wanted to make sure I was picking the right card and not just the one with the most bells and whistles. I dug through my Mint account and made a spreadsheet giving the average of what I spent in groceries, dining out/bars, gas, travel, and everything else for the past three years and then compared it with how much I’d get back from various cards. Don’t feel bad if you don’t want to follow suit, this is the behavior of a detail-oriented (let’s not mince words, a wee bit crazy) person. I recognize my …uniqueness… and am using it to help people who don’t want to do the research/math.
Before running the numbers Card 1 seemed to be the obvious choice as it gave a significantly higher yield in the category I spend the most in and a $250 bonus, but it also has an annual fee and foreign transaction fees. As with all things monetary, you never know unless you run the numbers. Here is the estimated sum of three years worth of cash back with these cards:
Sum: (1) $1,713.75, (2) $1,340.64, (3) $1,207.73 (4) $1,267.74, (5) $1,786.97, (6) $1,423.66
As you can see, card 5 wins but card 1 is a close second. Card 5 would give me about $570.11 in cash back every year, Card 1 $478.68. HOWEVER, if I get both of them and use them in the categories with the highest rate of return, I can get $869.61 cash back per year. That’s $419.61 more than I’m currently getting. Almost twice what I’m currently getting. UGH - WHY DIDN’T I DO THIS SOONER?!
If you aren’t inclined to doing a couple hours of research and building a spreadsheet as I did to find out which card is best for you, the key is not being blinded by large bonuses or moderately higher returns in one or two categories. Look at the long game - how much will you get back after that first year. If you spend a significant amount per month (1/3 or more of total spending) in just one or two categories, you would probably do best to get a card that gives you higher returns in those categories. Based on my experience, I still recommend you do the math before signing up; it’s worth $400+ a year. Frankly, a moderate return across all categories rather than a higher return in only one or two is probably best for most people.
4. $256 a year, minimum, plus at least 52 hours of my life back. Meal planning! Over the years I’ve learned to plan out the weekly dinners and shop accordingly as this makes it easier at the end of the day to decide what to cook, helps me eat healthier, and I save money. Like everything else on this list, it just takes planning, which takes effort, which takes time, which means that too often, it didn’t get done. I was meal planning when I was working full time and commuting two hours a day, but many weeks I only planned out two or three dinners and would have to go to the grocery store at least once during the work week to buy that night’s dinner. We all know not to go to the grocery store when we’re hungry, which I usually was by 6:30, so I’d buy (much) more than we needed. What many people don’t know is that you are more likely to overspend when you are in an extreme emotional state, whether that be very happy or very sad or in my case, very much annoyed at not being home yet at the end of a long day and hungry. I don’t have as much data to go on as I do in the other items on this list. I think $256 is a very conservative estimate of my savings. I believe it is much closer to >$500 a year but am erring on the side of caution.
I hope this list helps you to take action and save your hard-earned money. If you’ve had a similar experience where getting off your duff made a major impact in your financial life, let me, and everyone else learn from you in the comments
Cheers,
Ms. Moody
*According to this web calculator: https://dqydj.com/sp-500-dividend-reinvestment-and-periodic-investment-calculator/